Shane Cassells (Fianna Fail) | Oireachtas source

On 15 June this year at a meeting of the Joint Committee on Tourism, Culture, Arts, Sports and Media, the Irish Hotels Federation, IHF, attempted the magic trick of on one hand arguing for the extension of the 9% VAT rate and on the other hand defending escalating costs in the hotel sector for bedroom prices, a trick that Paul Daniels himself would have been proud of. However, in sawing that body in half the IHF was unable to fuse it back together. It left the legs dangling away from the torso when it was finished. Here we had a representative body for hotels which had been before the committee previously arguing for a reduced VAT rate of 9% in order to stimulate consumer activity and consumer sentiment in its sector, and rightly so. However, having obtained it, it did not pass it on in reduced costs to customers. It did the exact opposite.

On the day of the hearing I booked three flights to Santiago for less than the price of a room in a well-known hotel in the city where the previous week most Oireachtas Members had gathered for a night in support of Ukraine. At that committee hearing Fáilte Ireland's CEO, Paul Kelly, warned ahead of the summer trading season that price gouging would do the reputation of our hospitality sector severe damage abroad. He said we had a good reputation but early indications suggest that these scores of good value for money were likely to worsen over the summer. Ireland's reputation as a good value destination is something that this industry needs to be very conscious of. Mr. Kelly warned the IHF that if reputation is damaged it will take time to recover. However, the IHF did not listen because short-term gain trumped the long-term reputational value and image of the country.

In response to our questions that day on price extortion, the IHF said that it had no responsibility for what individual member hotels did in terms of price gouging. The IHF wants it both ways because equally it came in and made the case for all its members for maintaining a reduced VAT rate. On the one hand the IHF wanted to keep the VAT rate for its members. On the other hand, when we pointed out that its members are exploiting customers, it said that was nothing to do with it. It cannot have it both ways.I want to put on record that the IHF circulated figures to us last week on average prices around the country during the summer trading season. It also indicated the occupancy rate to us and it stated that in the summer month of June, the Dublin occupancy rate was 91%, the highest in Europe. It said that in July the Dublin occupancy rate was 85.8%, the second highest in Europe. These figures are just ahead of Edinburgh. Those figures are not a justification for then using the marketplace to try to have those inflated figures in the city centre; it is the complete opposite but they were circulated to us in the committee last week as if they were some kind of justification for what the hotels should be doing.

Senator Casey spoke about a broader debate and he is 100% right because the sector is far wider than just the hotel beds; it is the restaurants as well. The Restaurants Association of Ireland has made the point and I have made the same point before to the Minister of State that the price of a hotel room might double or treble on the weekend of an All-Ireland final but the price of a steak does not. We should not be penalising restaurants and bars on this issue. The Minister of State might say it cannot be done but we have pointed out that Belgium, Finland, Portugal, Estonia, Latvia, Malta and Slovakia all have a split rate. I ask the Minister of State to come back and examine that and to have that discourse with us.